Dates Visa MasterCard Discover American Express. Acquirers, subprocessors. support EMV. International ATM liability shift 2

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1 Network Updates Winter 2015 We are committed to working closely with you on achieving your business goals. As a part of this commitment, we carefully monitor Network changes and summarize them for your convenience. Following is the summary of information from American Express, Discover Network, MasterCard Worldwide and Visa U.S.A. regarding changes or updates to interchange rates, operating rules and regulations and other changes that may impact your company. We encourage you to call your Relationship Manager or our Contact Center at the number located on your monthly statement with any questions you may have regarding this information. EMV (Updates are in bold) Update on Card Schemes Acceleration of Chip Migration (EMV) The Program: MasterCard, Visa, American Express and Discover have released their roadmaps to EMV (Europay, MasterCard and Visa). These roadmaps begin the discussion of their plans to accelerate the migration to EMV chip technology in the United States. The card schemes roadmaps will help prepare the U.S. payment system for the arrival of mobile payments by building the necessary infrastructure to accept and process chip transactions. Dates Visa MasterCard Discover American Express April 2013 Acquirers and subprocessors must support EMV Acquirers and subprocessors must support EMV International ATM liability shift 2 Acquirers, subprocessors and direct connect merchants must support EMV data elements Acquirers and subprocessors must support EMV, including mobile October 2013 Merchant Account Data Compromise (ADC) relief (Phase I) Acquirers, subprocessors and direct connect merchants must support EMV data elements for Pulse transactions April rd Party ATMs must support EMV October 2015 US Liability Shift 1 US Liability Shift 2 Merchant ADC Relief (Phase II) October 2016 ATM Liability Shift 2 October 2017 Dispenser Liability Shift 1 Dispenser Liability Shift 2 US Liability Shift 2 US Liability Shift 2,3 Dispenser Liability Shift 2 Dispenser Liability Shift 2,3 ATM Liability Shift 1 1 Liability for counterfeit transaction shifts to party who does not have support for EMV. 2 Liability for various counterfeit transaction shifts to party who has least-secure support for EMV 3 Includes the US and its territories as well as the Caribbean, Central/South American region Copyright 2015 Vantiv, LLC. All rights reserved. Vantiv, the Vantiv logo, and all other Vantiv product or service names and logos are registered trademarks or trademarks of Vantiv, LLC in the USA and other countries. indicates USA registration.

2 The Visa, MasterCard, Discover and American Express EMV programs Incentives for those merchants who upgrade to EMV chip-enabled terminals. To encourage EMV adoption, Visa, MasterCard, Discover and American Express have each announced a waiver from annual PCI DSS validation. Contact your relationship manager for more information on the PCI DSS validation waiver. At least 75% of merchant s transactions originate from dual interface chip terminals and are capable of processing end-to-end chip transactions. The merchant has not been involved in a breach of cardholder data (merchants previously involved in a breach may qualify if they have completed subsequent PCI DSS validation). All merchants must continue to comply with PCI DSS. Program enrollment is required. For MasterCard, eligible merchants are Level 1 and Level 2 merchants MasterCard will allow for account data compromise relief October 2013 if 75% of transactions initiated at EMV compliant terminals - 50% relief October 2015 if 95% of transactions initiated at EMV compliant terminals - 100% relief Beginning October 2015, Visa, MasterCard, Discover and American Express will implement a liability shift for domestic and cross-border counterfeit transactions. Visa October 2015 Point-of-Sale liability for counterfeit fraud is assigned to party that is responsible for transaction not being done using EMV October 2017 Dispenser merchants have extended timeframe in consideration of cost/complexity October 2017 ATM liability for counterfeit fraud is assigned to party that is responsible for transaction not being done using EMV MasterCard April 2013 International ATM liability shift based on hierarchy of which party has the most secure option enabled. October 2015 Point-of-Sale counterfeit fraud liability is assigned based on hierarchy of which party has the most secure option enabled. Standard rules apply when both are equal. October 2017 Dispenser Liability Shift American Express October Point-of-Sale counterfeit fraud liability is assigned based on hierarchy of which party has the most secure option enabled. October Dispenser Liability Shift Discover October Point-of-Sale counterfeit fraud liability is assigned based on hierarchy of which party has the most secure option enabled. October Dispenser Liability Shift 2

3 Information related to liability shifts and PCI-DSS validation waiver is a summary and is subject to the appropriate network s operating regulations. Contact your Relationship Manager for more detail. Support of EMV Debit Solutions by Regional PIN Debit Networks The following Regional PIN Debit Network announcements have been made regarding EMV debit solutions. Debit Network Announced support of the Visa U.S. Common Debit EMV Solution Announced support of the MasterCard U.S. Common Debit EMV Solution Accel March 2014 March 2014 STAR February 2014 April 2014 Pulse March 2014 May 2014 NYCE April 2014 June 2014 CU24 April 2014 CO-OP April 2014 Shazam April 2014 July 2014 AFFN April 2014 Presto! June 2014 August 2014 Alaska Option* July 2014 July 2014 MoneyPass November 2014 *On October 6, 2014, Alaska Option announced that the company would be dissolved and that the process would take approximately six months to complete. To learn more about EMV and what Vantiv is doing to help merchants prepare visit our new EMV microsite. 3

4 MasterCard MasterCard Dues and Assessment Increase The Program: As previously communicated in the fall newsletter, the MasterCard Acquirer Brand Volume Fee, commonly referred to as Dues and Assessments, is a network fee that is assessed on all MasterCard sales. The Change: MasterCard periodically reviews and evaluates their fee structures in an effort to accommodate for system enhancements and improvements. As a result, MasterCard will increase their Dues & Assessments fee. The fee will continue to be assessed based on gross MasterCard sales volume. The Impact: Effective January 2015, merchants will see an increase in their MasterCard fees on consumer and commercial credit transactions less than $1,000 and on all consumer and commercial debit transactions. MasterCard Digital Enablement Fee The Program: As previously communicated in the fall newsletter, MasterCard has announced the introduction of a new Digital Enablement Fee. The Change: MasterCard will begin to assess a 0.01% fee on all consumer credit, commercial, and signature debit card-not-present (MO/TO and E-commerce) transactions. The Impact: Effective January 2015, merchants will begin to see the MasterCard Digital Enablement Fee assessed on their card-not-present volume. MasterCard Cross Border Fee Increase The Program: MasterCard currently assesses their Acquirer POS Cross Border Fee on all credit and debit (signature and PIN) transactions occurring at U.S. merchant locations when the Issuer is located outside of the U.S. MasterCard s Cross Border Fee is assessed at different rates depending on the transaction currency. The Change: MasterCard will update the Acquirer POS Cross Border Fees. The Impact: Effective April 1, 2015 the following rate modifications will be implemented: The Cross Border rate will increase by 0.20% to 0.60% on transactions when the Issuer location is non-u.s. and the merchant transaction currency is U.S. dollars The Cross Border rate will increase by 0.20% to 1.00% on transactions when the Issuer location is non-u.s. and the merchant transaction currency is not U.S. dollars 4

5 Visa Visa Dues & Assessments Increase The Program: The Visa U.S. Acquirer Service Fee, commonly referred to as Dues & Assessments, is a network fee that is assessed on all Visa sales. The Change: Visa aims to accelerate the development of new products and markets and to invest in an infrastructure that allows system participants to grow their business. Visa periodically reviews its pricing to ensure that these objectives are supported and that the value proposition of Visa s products and services is properly reflected. The Impact: Effective January 1, 2015, Visa increased their U.S. Acquirer Service Fee on all credit products (debit products will not see an increase). Fees will continue to be assessed based on gross Visa sales volume. Visa Acquirer International Service Assessment (AISA) Fee Increase The Program: Visa currently assesses their Acquirer International Service Assessment (AISA) on transactions occurring at U.S. merchant locations when the Issuer is located outside of the U.S. The Change: Visa will update the U.S. Acquirer International Service Assessment (AISA) fee types and corresponding rate structure. The Impact: Effective April 1, 2015 the following rate modifications will be implemented: Increase the AISA rates by 0.40% to 0.80% on transactions when the Issuer location is non-u.s. and the merchant transaction currency is U.S. dollars Charge an incremental rate of 1.20% when the Issuer location is non-u.s. and the merchant transaction currency is not U.S. dollars Visa Contactless Payment Acceptance Rules Reminder The Program: Visa reminds merchants choosing to accept Visa-branded NFC-enabled contactless payments to accept all Visa-contactless payment forms factors, including cards and mobile devices that bear the Visa brand mark or contain Visa payment account credentials. Visa s Honor All Cards requirement is intended to provide a consistent and positive experience for the consumer and avoid brand confusion at the point of sale. Merchants continue to retain options as to whether to employ these new technologies and whether to extend contactless functionality for Visa payments, but must do so consistently. Requiring that all Visa NFC payment cards and devices have equal access to the point of sale ensures that consumers not be forced to expend effort to determine if a merchant will accept the consumer s particular Visabranded payment card or device. 5

6 Visa Updates Digital Wallet Best Practices Guide for Merchants The Program: Visa makes available a Digital Wallet Best Practices Guide for merchants planning to integrate their e-commerce operations with a digital wallet service provider. The guide provides recommendations for a smooth, secure integration with a new generation of service providers that facilitate payments through mobile devices and Web interfaces. The Change: Visa s best practices guide was originally published in 2013 and since that time digital wallets have continued to evolve rapidly. Visa has updated the Digital Wallet Best Practices Guide for merchants to capture the following basic principles: Continuing to protect cardholder data Carefully analyzing internal and external fraud controls Adhering to technical integration specifications Visa s Digital Wallet Best Practices Guide for Merchants can be found at the link below: PIN Debit Alaska Option The Program: For more than thirty years, Alaska Option has offered industry-leading EFT services, while maintaining a high level of customer service to their clients. The Change: Industry consolidation and increased competition, combined with the rise in costs to maintain a competitive and compliant EFT platform, have resulted in significant compression on the fees charged for these services. These factors have made it increasingly difficult for Alaska Option, as an independent regional network, to continue to offer best-in-class services at competitive prices. The Impact: In October 2014 the Alaska Option Board of Directors made the decision to dissolve the company. The process is anticipated to take approximately six months to complete. Alaska Option management and staff are committed to providing the same high level of customer service through this transition period, and will work closely with clients to ensure a smooth transition to a new EFT service provider. 6